5 banks including Indian Bank, Andhra Bank and Bank of Maharashtra hike lending rates

Five banks, including Indian Bank, Andhra Bank and Bank of Maharashtra, have raised lending rates by up to 50 basis points in line with other lenders.

The hike in interest rates come within a week of the RBI raising its key policy rates by a hefty 50 basis points to check high inflation.

With the hike, all loans, including home and auto, will become more expensive.

Indian Bank, Andhra Bank and Dhanlaxmi Bank raised lending rate by 50 basis points, while Bank of Maharashtra and Kotak Mahindra Bank increased it by 25 basis points.

State-owned Indian Bank and Andhra Bank hiked its base rate or the minimum lending rate and Benchmark Prime Lending Rate (BPLR) by 50 basis points to 10.75 per cent and 15 per cent, respectively.

Another public sector lender Bank of Maharashtra raised base rate and BPLR by 25 basis points to 10.50 per cent and 14.75 per cent, respectively, the bank said in a statement.

More than dozen banks have already announced a hike in interest rates following the monetary action by the RBI on July 26 and more are likely to do so in the coming days as cost of funds has gone up.

Last week, the RBI raised the short-term lending (repo) rate by 50 basis points to 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent in a bid to tame inflation.

Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9 per cent from the earlier level of 8.5 per cent. (PTI)